When Bobby Patton’s company started selling more of its telecommunications products overseas in the late 1990s, his bank began to pull back on the firm’s line of credit.

“They were concerned about the risk with us trying to collect payments from international customers,” said Patton, who with his brother runs Patton Electronics Co. in Gaithersburg.

In need of financing, the company turned to a new bank, which introduced the Patton brothers to a little-known federal agency called the Export-Import Bank. Created 80 years ago by Congress, the bank mostly provides financing to foreign buyers of American goods and services, but it also offers trade credit insurance to U.S. firms to cover losses if the company fails to collect payments from customers overseas.

In Patton’s case, because those outstanding bills were the collateral on which his bank was loaning him money, the insurance from the Ex-Im Bank was the ticket to “securing a working line of credit that’s collateralized by our international receivables.”

“It assures our bank that those foreign sales are okay, that the payment is going to come in,” he said. “And that has allowed us to continue to grow our business internationally.”

But for how much longer?

The Ex-Im Bank’s current charter expires at the end of September, and recent shifts in the political landscape in Washington have put the department’s future in serious doubt. The new House Majority Leader Kevin McCarthy (R-Calif.) recently said he favors shuttering the agency and Republicans appear content to let the Ex-Im Bank’s current charter run out without reauthorization.

Critics have long cast the bank as a prime example of corporate welfare funded by the federal government, noting that the agency puts U.S. taxpayer dollars at risk to help foreign corporations buy goods and services from some of the largest U.S. corporations — ones that lawmakers say should be able to find financing services from the private sector and do not need taxpayer-funded sales support.

Indeed, Ex-Im’s data show that more than 80 percent of the bank’s funds last year were used to finance purchases from large businesses, including the likes of Boeing, Caterpillar and General Electric.

“If you’re a politically connected bank or company that benefits from Ex-Im, no doubt you would like it to continue,” Rep. Jeb Hensarling (R-Tex.), chairman of the House Financial Services Committee, said during a hearing last week, citing those same statistics. “It’s a sweetheart deal for you; taxpayers shoulder the risk, you get the reward.”

On the other hand, he added, “if you work at a small business, or another American company trying to compete in the global marketplace, it’s unfair,” he added.

However, Ex-Im’s supporters say that’s a misleading way to crunch the numbers, noting that 90 percent of the agency’s transactions last year supported sales by small businesses. It’s no fault of the bank, they say, that a Boeing 787 jetliner costs exponentially more to finance than the products most small companies are selling.

In addition, they point out that the bank’s operations have not been adding to the national deficit. In fact, Ex-Im has turned a profit through the fees it collects every year since 2008. Last year, the agency returned more than $1 billion to the Treasury.

“I want to make sure that these small businesses and manufacturers have the tools they need to capitalize on opportunities around the world,” Sen. Maria Cantwell (D-Wash.), who chairs the Senate Small Business and Entrepreneurship Committee, said earlier this week. “One of those tools is the Export-Import Bank.”

Cantwell is part of swelling number of Democrats, including President Obama, as well as a few dozen Republicans, who have taken up the fight to reauthorize the Ex-Im Bank. For its part, the White House has asked Congress not only to reauthorize the bank for five years, but to also increase the amount of money the agency can lend each year.

The contentious political battle has serious ramifications for companies in the Washington region. In 2013, the Ex-Im Bank authorized 93 transactions totaling $640 billion to support exporting by Virginia companies. In Maryland, the bank approved 47 deals for a total of $52 million (the bank did not conduct any business with firms in the District).

Should Ex-Im’s charter not be renewed, some of those local business owners, like Peter Bowe, worry that their international buyers will start looking for sellers in the many other nations that provide similar export financing programs.

“We have a bunch of European competitors that have comparable or better financing options,” said Bowe, president of Baltimore-based Ellicott Dredges, which manufactures dredging equipment used in mines, harbors and canals and sells to clients in more than a dozen countries.

“If Ex-Im isn’t reauthorized, those competitors will be able to go to our customers and offer affordable five-year financing,” Bowe said. “Those customers are going to turn to us and say, ‘What can you offer us?’ Our answer would be ‘Nothing.’ ”

Consequently, without Ex-Im’s financing programs, Bowe expects his company would be in jeopardy of losing between 10 percent and 20 percent of its sales to foreign competitors.

In Patton’s case, he has already started shopping for alternative trade insurance options in the private market — but he hasn’t found anything that offers the affordable rates he pays for Ex-Im’s backing, nor has he found an insurer willing to work with him in as many countries (Patton Electronics has shipped its products to more than 150 countries).

“It would be a pretty traumatic experience for our company if it wasn’t reauthorized,” Patton said, noting that he is aware of at least six other small businesses in Gaithersburg that rely on the bank’s trade credit insurance. “Even if I could find an alternative, I would have to start going through a separate credit review for every foreign order, whereas Ex-Im looks at our entire international portfolio and makes a determination.”

“So not only would it be more expensive, but it would slow us down and make me less responsive to the market,” he added.

Moreover, Patton takes no issue with the fact that most of the bank’s funding supports sales for large corporations. Rather, every time Boeing sells more of its planes to buyers overseas, he said, it creates more work for countless American small businesses.

“Companies like Boeing, GE, Caterpillar, what do you think their supply chain looks like?” he said. “It consists of hundreds and hundreds of small companies like mine. So all those small suppliers would be affected by this, too.”

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J.D. Harrison covers startups, small business and entrepreneurship, with a focus on public policy, and he runs the On Small Business blog.

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